09-16-2010 09:40 AM
It was only 7 months ago that I had a 712 FICO score even though I had $70k in credit card debt and $65K in student loans. I never missed any payments even though I was maxxed out. By May of 2010, my payments and interest rates had gone up and I was having trouble. I worked with Citibank (my largest creditor at $40k) to close my account and give me a ZERO percent interest rate for 1 year in order to lower my payments and allow me to pay on my other accounts more aggressively. However, I didn't consolidate or do any sort of long term debt solution as I didn't want to completely destroy my credit.
This strategy has been working. However, it dropped my credit to 630. It looks like I will have the opportunity to pay off about $30K in credit card debt in 1 payment before the end of the year. I am wondering if I should apply that towards Citibank or pay off my other cards which are still active and open. What would you do? I need my score to go up the most it can. Please help.
09-16-2010 11:50 AM
I suspect that your agreement lowered your available revolving credit, which skyrocketed your utilization. I'd pay down / off the revolving credit (not the student loans) with priority put on the highest interest rates. You should see a good jump for each 10% of utilization you go down.
myFICO is the consumer division of FICO. Since its introduction 20 years ago, the FICO® Score has become a global standard for measuring credit risk in the banking, mortgage, credit card, auto and retail industries. 90 of the top 100 largest U.S. financial institutions use the FICO Score to make consumer credit decisions.>> About myFICO